ICAP, the biggest broker of interest-rate swaps between
banks, rose as much as 4.6 percent to the highest intraday price
in more than 11 months. The shares were up 3.5 percent at 361
pence at 11:20 a.m. It was the best performer in the Stoxx 600
Financial Services Index.

Tullett Prebon, an interdealer broker that lines up buyers
and sellers of securities for banks, rose as much as 5.7 percent
and was up 4.7 percent to 287.9 pence, the highest price since
Feb. 25. It was the fifth-best performer among the 600 members
of the FTSE All-Share Index.

UBS upgraded both ICAP and Tullett Prebon to neutral from
sell, citing valuations as well as the likelihood of increased
trading volumes. Both companies have underperformed financial
stocks by about 35 percent over the past year and exchanges by
about 30 percent, the bank said.

“This underperformance has been driven by a relative de-rating and weak earnings momentum,” UBS said in a note to
clients. “We see risks to the upside on both fronts.”

Interdealer broker trading volumes are up 9 percent in May
from April and 6 percent from a year ago, UBS said. The volume
of shares traded on the FTSE All-Share Index (ASX) last year was the
lowest this century, according to data compiled by Bloomberg.

UBS raised its 12-month share price target for ICAP by 11
percent to 340 pence from 305 pence and removed the stock from
its least-preferred list. It increased the price target for
Tullett Prebon by 12 percent to 280 pence. The bank also raised
its earnings estimates for both companies.